GMA - February 2021 by VIAA

GREEN MOUNTAIN AGENT VERMONT INSURANCE AGENTS ASSOCIATION | February 2021

It's Insurance Carriers Month - Get Involved!

Vermont Insurance Agents Association is a statewide trade association representing nearly 100 independent insurance agencies in Vermont, with more than 900 employees. VIAA member independent insurance agents represent more than one insurance company, and as a result, can offer clients a wider choice of auto, home, business, life and employee benefits.t

Green Mountain Agent is a publication of

CONTENT ________________ February 2021

05 Letter from the President

600 Blair Park Road, Suite 100 Williston, VT 05495 Phone: 802-229-5884 Fax: 802-876-7912 www.viaa.org

06 Young Agent Committee News 11 It is Insurance Career Month 15 On the Hill

VIAA Officers President Daniel J. Rodliff, CIC, CPIA, LUTCF

19 E&O Corner Misrepresentation

Vice President Michael Barrett

21 Secondary Residences Surge

Secretary/Treasurer Jessica M. Fleury, ACSR

29 Commentary

National Director Ronald Bixby

33 Agency & Company News

Directors Chip Ams Ian Sutherland Alan Kinney

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LETTER FROM THE PRESIDENT ______________________________ February 2021 Well, the election cycle is over and regardless of which side of the aisle you sit, I think it's safe to say that it's a relief that the endless campaigning is over, at least for now. 2020 showed us that we cannot be complacent about what happens in Washington, no matter how distasteful we might find the process. To protect our businesses, our livelihoods, and our families, we must participate - we need to voice our opinions and support candidates that share our positions. We are kicking off the 2021 InsurPAC campaign and I urge you to consider giving a donation. InsurPAC funds allow Big 'I' National to support candidates who understand business and will be a voice for us to protect our interests. Whether it's taxes, unfair regulatory requirements or any other business issues, we need individuals on the federal level who will provide fair representation of our business community.

Dan Rodliff VIAA President

To make your 2021 InsurPAC contribution, please click on the image below. Thank you and take care- see you next month! Dan

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AGENCY PERPETUATION

IT IS INSURANCE CAREERS MONTH; HELP PROMOTE YOUR INDUSTRY February is Insurance Careers month. More than 1,000 global industry organizations have come together in support of the Insurance Careers Movement, a grassroots initiative that seeks to inspire young people to choose insurance as a career, share what makes the industry a great one to work in, and collaborate to retain emerging leaders in insurance. While the 2021 Insurance Careers Month will be virtual due to the coronavirus pandemic, we look forward to global conversations that will highlight how you can bring your authentic self to work in insurance, can create your own career path and help others climb, and how companies are emphasizing wellness and

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mental health and are making a difference. We look forward to your stories and inspiring others together to choose insurance as a career. Thank you for your leadership in the industry and collaboration. To help anyone who wants to participate in this great movement, a complete set of resources and tools are available, including a complete manual, social media calendar and much more.

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ON THE HILL: President Biden Unveils COVID-19 Relief Plan

President Biden outlined the contours of the new administration's “American Rescue Plan" to provide further COVID-19 relief to the nation. As outlined, the proposal would provide an additional $1.9 trillion in COVID19 relief. The plan would provide nearly $1 trillion in payments to Americans through an additional $1,400 in stimulus checks to eligible Americans and an increase in federal unemployment aid from $300 a week to $400 a week. The plan would also subsidize COBRA health coverage through Sept. 30, for workers who lost their employersponsored health insurance with a 100% tax credit for COBRA coverage premiums. In terms of its impact on businesses, the plan would provide an additional $50 billion to small businesses through a new federal grant program and investments in state, local, tribal and nonprofit financing programs that make

low-interest loans and provide venture capital to entrepreneurs. Biden's plan would also raise the minimum wage to $15 an hour as well as end the “tipped" minimum wage and the sub-minimum wage for people with disabilities. The proposal would also reinstate the paid sick and family leave benefits that were enacted at the beginning of the pandemic and had just recently expired. Additionally, the plan calls for $350 billion in funding for state and local governments, $20 billion for a national vaccine program and $50 billion for COVID-19 testing. As the Biden Administration begins its term with a narrow majority in the U.S. House and a 50-50 split in the Senate, passage of the “American Rescue Plan" will be a top priority for President Biden.

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C E O & R O N ER

Should an Agency Inform Insureds of Cancellations for Nonpayment? By Big 'I' Virtual University Faculty

Question: What's the best practice for informing insureds that a policy on a premium finance agreement is being canceled for nonpayment? Should the agency let the insured know and track down the premium past due or just let the policy lapse?

Response 4: What are the provisions stated in the policy and state law? Your E&O provider will tell you to never reach out to the client. But in reality, I would bet that a significant number of producers reach out to assist their client and income stream with a friendly reminder.

Response 1: It’s a very bad idea to start a precedent in contacting a client because they tend to start relying on the agent.

You are in a service business. If you got them the premium finance contract you took on a position of concern for the insured.

If the agent does not contact them, a problem may arise. Agents often get mail that was intended for a different agency. This may be true for their mail. If their mail went elsewhere there may be no warning to contact the client. Don’t start this dangerous precedent.

Response 5: If the policy is being cancelled for nonpayment specifically, the cancellation is not valid since the carrier has already been paid by the finance company. The only correct way for that policy to be canceled is by the insured’s request. The named insured gave that limited power of attorney to the finance company when they signed the initial financing agreement.

Response 2: It is up to the insured to pay. I doubt any of the utilities call folks to tell them to pay. That is not a dependence you want to develop. Response 3: Best practice is to let the process work and do not involve yourself with trying to “rescue” late-paying customers. It creates more work, usually only helps the already-unprofitable customers, and is an errors & omissions exposure. However, if you’ve made it a practice in the past to contact late-paying customers to remind them to pay their past-due bill, then you’d better remind every client. Then, you need to evaluate a process for how you contact customers to tell them you will no longer send past due reminders. The bottom line is: you need a universal practice for all customers—the same way every time for every customer. Your state association and your E&O carrier will be able to offer you guidance on this subject.

The finance companies know that a cancellation notice they issue for nonpayment is not valid—they just want to scare the insured into paying. If the carrier issues a notice of cancellation which includes “nonpayment” as the reason, you need to intercede by either getting the insured to pay so that the carrier can keep the policy in force or getting the carrier to reissue the cancellation notice properly showing the reason as "insured request." Response 7: I would not get involved in tracking down any past due premium. Staying out of the equation entirely would certainly be the most conservative position. Response 8: Don't give the customer any special treatment. This is not the agent's responsibility and opens the door for E&O claims. The premium finance company is in charge. Keep yourself out of it

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VIAA Education February

2021

Virtual Courses

Vermont CE Deadline is March 31, 2021 INSURANCE FRAUD: RED FLAGS FOR PROPERTY AND LIABILITY INSURANCE

KEY QUESTIONS TO ASK WHEN WRITING HOMEOWNERS INSURANCE

ACSR #1 - HOMEOWNERS INSURANCE

AAI 81 A - PRINCIPLES OF INSURANCE

CERTIFICATES OF INSURANCE

INSURANCE FOR SMALL BUSINESS

3 CEUS February 9, 2021

6 CEUS February 10, 2021

3 CEUS February 11, 2021

3 CEUS February 23, 2021

8 CEUS February 24, 2021

3 CEUS February 25, 2021

Open

Secondary Residences Surge

Coverfage

By Sue C Quimby, CPCU, AU, CIC, CPIW, DAE

The pandemic of 2020 was marked with significant changes to how people thought about vacations and travel. With travel restrictions, fears about flying, and new ways of thinking about working or going to school, the idea of a second home that is within reasonable driving distance suddenly became very attractive. Another factor is the desire of city apartment dwellers looking for more space and a little less togetherness. In June 2020, for example, demand for properties in the Adirondacks region of New York State started outpacing supply as people looked for alternatives. Other areas of the country, such as Rehoboth Beach in Delaware have seen similar surges in demand. According to the National Association of Realtors, vacation home sales from July to September 2020 increased 45 percent over the prior year. Existing home sales also increased 13 percent during the same period. On a state level, pending sales in New York were up 42.6 percent. www.viaa.org

Under IRS regulations, a second home is one that the owner lives in at least part of the year. Classic examples are â€œsnowbirdsâ€? who have a winter residence in Florida, or a city resident who has a cabin or house in the mountains or at the shore. Some are used solely by the owners, while others are rented out. Historically, secondary residences have been more difficult and expensive to insure, since they are often vacant during extended periods of time and may be in locations that are susceptible to more severe weather events. In the past, secondary residences were often used for weekend getaways and periodic vacations. With more and more people working and learning remotely, no longer is a second home a place to get away from it all. The secondary residence may now be where owners spend the majority of their time, with the primary home relegated to the times when they need to go into the office. In fact, real estate appraiser 21

Secondary Residences Surge continued

Jonathan Miller of Miller Samuel Inc. uses the term “co-primary” to describe this situation. High speed internet is the key. As long as there is internet/Wi-Fi access, people can work or go to school from the beach or mountains as easily as they can at the primary home. For those who already own more than one home, this could mean renovations to upgrade systems and reconfigure work and learning space. These changes may mean that the coverage limits need to be upgraded as well. Companies who write personal lines coverage need to reconsider their underwriting procedures to ensure that all changes in exposure are addressed. While the idea of a cabin in the woods may seem romantic, there are risks to consider when providing coverage for secondary homes. Beach and lake front properties may be subject to flooding, hurricanes or other extreme weather events. Mountain cabins are often inaccessible at some points during the year. Such homes may be subject to more restrictive policy conditions, such as hurricane or wind deductible, or requirements for flood insurance. The influx of full-time residents to “vacation” towns puts a strain on the local services, including fire, police and grocery stores. Not Always Romantic: Secondary Residence Risks Beach and lake properties are subject to flood, hurricanes or extreme weather Mountain cabins can be inaccessible during some parts of the year Influx of residents can put strain on local services in vacation towns Insurance for a secondary home is similar to that required for a primary residence. In some cases, the primary homeowners policy can be extended to include the secondary 22

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home, but coverage is not automatic, and limits may not be adequate. This is especially true when the secondary home is used as an income property. Coverage for loss of income is an important consideration, as the income from the second home may allow the owner to use the property at virtually no cost during the slow seasons. While excess or umbrella liability is recommended for everyone, it is particularly important for those with secondary residences whether or not they are rented out. Standard homeowners insurance companies have strict eligibility requirements. For example, residences that are rented out at any time are often considered business properties and may not qualify for a homeowners policy. A home that is not occupied all the time poses additional hazards from a property and liability standpoint. Underwriting considerations include turning off water in areas that are prone to freezing, installing security cameras and systems, and sensors that remotely monitor interior temperatures. These

Secondary Residences Surge continued

considerations are applicable to both the primary home that may now be unoccupied for extended periods as well as the secondary residence. Working from a home (or a secondary home) presents additional exposures to be considered. Business equipment such as computers, phones and printers that are provided to employees is usually not covered under a standard homeowners policy. The exposure increases when such property is transported back and forth between the two residences. Inland marine policies may be helpful in such situations as they offer more coverage flexibility than the traditional homeowners policy on its own. Although personal property under a homeowners policy is covered virtually everywhere in the world, personal property that is at the secondary residence is usually subject to lower coverage limits than property at the primary home. Todayâ€™s technology makes it easier to monitor conditions remotely. Security cameras and thermostats can be monitored on a computer or smart phone. A change in temperature may mean a window or door is open or broken, or the heating system is malfunctioning. Water flow sensors alert the owner to possible pipe bursts, or a faucet that has been left on. Many carriers are requiring installation of water sensors that shut the system off especially where homes are rented, and renters may be unfamiliar with shutoffs or just careless and leave water running. These systems have wireless options and alerts notifying central facilities in addition to shutting the main water supply off. Underwriting Consideration for Secondary Residences Turning off water in areas prone to freezing Installing security cameras and systems

Mounting sensors that remotely monitor interior temperatures Security cameras and alarm systems not only warn the owner when someone tries to enter the home, but they can also act as a deterrent to criminal activity. These camera and alarm systems have video footage, send text alerts to the owner and the central monitoring station, and can be tied into local police departments. Some carriers are requiring security systems as a condition for insurance on some secondary residences. They are also a good idea for primary residences that are now unoccupied for weeks and possibly months at a time. Having a second house can also mean double the expenses as well as the work to keep everything running smoothly. For some, this may result in a lapse in maintenance and upkeep, which is a reason some owners choose to rent their property out for at least part of the year. Owners may be able to completely pay for the mortgage, taxes, and other expenses of the second home by renting it out during popular times of the year. When the secondary home is a source of revenue, coverage for potential loss of income will be needed. However,

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Secondary Residences Surge continued

rental properties are also subject to an increased potential for damage or theft by tenants. Annual inspections and renewal questionnaires can help shed light on potential risks to be avoided or reduced. The concept of a secondary residence is not a novel idea, however the recent surge in purchases may lend to not only new trends in real estate but in the insurance industry as well. With an increase in secondary residences, it may make sense for companies to revisit their underwriting considerations. The use of homes currently in a company’s book of business may have changed and as a potential business opportunity, there is likely a greater need for insurance coverage on secondary residences. Keeping in mind the changing needs of homeowners as we traverse these unknown times will play a crucial role in helping to keep them and their homes safe.

This article was previously published in the New York Insurance Association’s Your NY Connection Magazine® and is provided courtesy of MSO®, Inc. (The Mutual Service Office, Inc.) for non-commercial use only. For any other licensing requests or permissions, please contact squimby@msonet.com. © MSO®, Inc. 2021. MSO provides advisory services for all property and casualty lines except workers compensation. This includes customized forms and manuals for insurers, MGA's and agents/brokers. Additional information is available at www.msonet.com.

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Parental Liability for Auto Accidents

William C. Wilson, Jr. CPCU, ARM, AIM, AMM is the founder of InsuranceCommentary.com. He retired from the Independent Insurance Agents & Brokers of America in December 2016 where he served as Assoc. VP of Education and Research and was the founder and Director of the Big "I" Virtual University for over 17 years. www.viaa.org

For years, I have written extensively about how to insure the auto liability exposures of teenagers (and other resident family members). Here is one such article: “Kids’ Kars Revisited” This article is currently public and links to several other related articles, though they are password protected and can only be accessed by members of the Big “I”. I recommend that you read the article above before continuing with this article. Most of the cited articles originated from real-life coverage and claims situations where someone, most often an attorney or financial planner, recommended that a resident family member, usually a child, be insured on their own personal auto policy (PAP) rather than the PAP of their parents or head of household. This is almost always VERY bad advice. The premise of such recommendations is frequently that a family member such as a child has little or nothing in the way of assets and income to attach if they are liable, so the suggestion is that they insure the vehicle they own and/or use on their own minimum limits PAP. One problem with this is that, while the child has little on no assets or income today, they likely will over the coming decades and those future financial resources can likely be accessed in a lawsuit. Another reason for the suggestion to remove a family member from the parents’ PAP is sometimes that the family is located in a state without a parental liability statute, so the parents allegedly have little or no potential liability. This point is particularly stressed when the child is 18 years of age or older, the premise being that the parents, without a parental liability statute, are insulated from lawsuits against the child. This is a ludicrous and dangerous presumption.

Ashley Gold, an attorney at Wood Stabell Law Group, PLLC, brought the following case to my attention where a parent was held liable for negligent entrustment in an accident involving an adult child: Carman v. Kellon I wrote about another case over seven years ago where a 33-year-old defendant was under the influence of near-lethal amounts of drugs and alcohol when she got behind the wheel of a truck owned by her parents. She crossed the center line and struck the plaintiff, a 17-year-old high school senior, head-on. The jury found the parents responsible for negligently entrusting this vehicle to the defendant who had a long history of drug abuse, rehab, and several car accidents. The decision totaled $1.2 MILLION. My recommendation is that, wherever possible, all resident family members should be insured under a single PAP (and umbrella). The reason is that most PAPs exclude liability coverage for the use of vehicles furnished or available for the regular use of family members unless that vehicle is declared on the subject policy. In other words, if the parents are successfully sued for an accident involving a resident family member whose auto is insured under a separate PAP, the parents’ own PAP likely does not cover them. If it is impossible for all family members to be insured under one PAP, then all PAPs in the household should be as identical as possible and carry the same high liability limits. Needless to say, an umbrella is also recommended.

The reality is that there are MANY ways to allege liability beyond someone’s status as a parent. That became apparent most recently when 30

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COMPANY & AGENCY NEWS www.viaa.org

Laberge Insurance Agency takes top agency honors for 2019

Cooperative Insurance Companies of Middlebury, VT is pleased to announce it has awarded the Laberge Insurance Agency with its 2019 Presidentâ€™s Award of Excellence. Each year Co-operative Insurance chooses the agency that out- performed all others in the areas of growth, profitability and working relationship with the company and its members. The belated award was presented at Co-operative Insuranceâ€™s home office in lieu of a previously planned outing that was cancelled due to the COVID 19 pandemic. The Laberge Insurance Agency has a long, outstanding history of serving the community and protecting its individuals, businesses and farms with Co-operative Insurance since 1955.

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Acuity Achieves Robust Companywide Growth in 2020

Despite the challenges presented by the ongoing pandemic, Acuity added the most new business in the insurer’s 95-year history in 2020, propelling a surge in top-line revenue of over $120 million. Acuity has achieved positive growth for 11 consecutive years. The insurer has grown seven-fold over the past 20 years and in just the past 8 years has doubled its top-line revenue. With Acuity’s expansion came increased job opportunity: the insurer hired 115 employees in 2020 and plans to hire more than 120 in 2021. Acuity’s strong, profitable growth companywide was fueled by successes in both personal and commercial lines. In commercial lines, with a whopping 18.9% increase in new business and retention at near-record levels, Acuity’s overall commercial growth in 2020 finished at 10.7%. In personal lines, COVID-19 did have a downward impact on total written premium as Acuity provided millions of dollars in rate relief to customers and vehicle owners significantly curtailed the number of miles driven; however, Acuity increased its number of package policies in 2020 compared to the prior year.

Vermont Mutual Donates $15,000 to Spectrum Youth and Family Services Vermont Mutual Insurance Group® recently donated $15,000 to Spectrum Youth and Family Services as part of the Cats Win, Community Wins program, a multi-year, community-based collaboration between Vermont Mutual Insurance Group and the University of Vermont. The Cats Win, Community Wins initiative was created by Vermont Mutual and UVM Athletics to give back to local charitable organizations. As part of their arrangement, Vermont Mutual donates $100 for every Catamount win to a selected charity. Due to the COVID-19 pandemic that surfaced in early 2020, most Catamount games had to be cancelled. As a result, Vermont Mutual wanted to ensure that the excellent work Spectrum does for their community was still recognized. To that end, Vermont Mutual decided to increase their usual contribution to address the lack of games played and won by UVM. The Cats Win, Community Wins program will continue throughout the upcoming year; with 2021's charitable beneficiary being Vermont Foodbank.

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Hickok & Boardman Insurance Group hires new Client Advisor for Stowe office Jonathon Smith has joined Hickok & Boardman Insurance Group as a Client Advisor as of January 2021. Smith, who grew up in Stowe, joins the organization after seven years of insurance sales experience in New York City. He previously worked for Chubb and Unum Insurance as a Business Development Manager and Account Executive. Jonathon received his bachelor’s degree from Fordham University. He resides in Waterbury with his wife, Emily Cook. In his free time, he enjoys hiking, cooking, and playing golf.

Acuity Earns Best Workplace Recognition from Glassdoor

Acuity has been honored with a Glassdoor Employees’ Choice Award for a second consecutive year. The award, which recognizes the 100 Best Places to Work among U.S. large companies, is based solely on the input of employees who elect to provide feedback on their jobs, work environments, and companies on Glassdoor, one of the world’s largest job and recruiting sites. According to Glassdoor’s review page for Acuity, the insurer earns a 4.9 out of 5.0 rating, with 99% of respondents recommending Acuity to a friend. Through Glassdoor, employees voluntarily and anonymously share insights and opinions about their work environments by completing a company review, designed to capture a genuine and authentic inside look at what a specific job may be like at a particular company. When sharing a company review on Glassdoor, employees are asked to rate their satisfaction with the company overall and key workplace factors such as career opportunities, compensation and benefits, culture and values, senior management, and work/life balance. 36

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Hospitality Insurance Group Launches ‘Pay as You Pour’ Program Hospitality Insurance Group is launching a new program that will give bars, restaurants, and any other eligible liquor liability policyholders more flexibility in how they pay their insurance premiums. The Pay as You Pour program, offered in partnership with First Insurance Funding, will help businesses improve their cash flow by basing their bimonthly premium payments on how much liquor they sell. Premium payments will be lower when sales are down and, conversely, when sales volume is higher, businesses will be contributing more to premium payments. The program comes as many in the hospitality industry face a winter slowdown in business, particularly amid the ongoing COVID-19 pandemic.

Union Mutual Insurance Company Hires New Vice President of IT and Operations The Board of Directors for Union Mutual Insurance Company voted at their December meeting to appoint Philip (“Phil”) Lambert to be the Company’s Vice President of Information Technology and Operations. Lambert starts with the Company in the beginning of January. Lambert has almost 20 years of experience in the insurance industry. He is former owner of Roundhill Express, LLC, an insurance broker offering habitational insurance in the greater New York City area. Lambert will join the company just before the retirement of Gary Ouellette, who is the current Executive Vice President of the Company. Ouellette will be retiring June 1 of 2021. Lambert will be based in the Company’s Latham New York office and lives with his family in Saratoga Springs, New York.

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Aislyn Allen has become the newest members of the VTAIP

The Vermont Association of Insurance Professionals is pleased to announce that Aislyn Allen has become the newest members of the VTAIP. Membership in VTAIP is an industry commitment to the insurance community through leadership development, career enhancement and creating relationships with other industry related connections. The VTAIP meets monthly and encourages outside community members to join us at our dinner meetings to connect and network with insurance related professionals.

Vermont Mutual Distributes $1,000,000 to COVID-19 Relief Efforts Vermont Mutual Insurance GroupÂŽ, a Vermont-based Property & Casualty insurer operating from Montpelier, VT for nearly 200 years, has completed the distribution of $1,000,000 to 45 Vermont nonprofit organizations to help with COVID-19 relief efforts. As the impact of COVID-19 on the Green Mountain state quickly became evident in early spring of 2020, Vermont Mutual responded with a declaration of one million dollars reserved specifically for COVID-19 relief efforts in Vermont. A significant portion was immediately distributed to the Vermont Foodbank and the Vermont Community Foundation. These two charitable institutions were chosen for their well-established infrastructures and their ability to quickly assist fellow Vermonters in need. In addition to these two organizations, grants were awarded to 43 other very worthy charitable organizations throughout Vermont. A full list of the recipients can be found on the Vermont Mutual website. Beyond these charitable donations, Vermont Mutual also instituted an Auto Premium Payback Program which resulted in nearly $5 million in premium payback to its customers. These customers where given the opportunity to receive a refund or pay that refund forward by selecting from several charities focused on COVID-19 relief efforts, resulting in additional funds being put to work in both Vermont and across New England.